supplier risk management

Supplier risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings that are caused by the organization's supply chain

Companies with supplier risk management plans in place typically place a chief risk officer (CRO) in charge of overseeing the effectiveness of the organization's supplier risk management strategy. An effective plan reduces supply chain risk whenever possible and anticipates how the organization could swiftly respond to supply chain disruptions.

Supplier risk management plans should address the many different areas where supplier issues may arise. These stages can include onboarding (beginning a relationship with a supplier), financials, supplier collaboration, mergers, integrated supply chains, natural or geopolitical disasters, and criminal or terrorist threats to the supply chain.

See also: risk management, vendor risk management, risk avoidance


This was last updated in July 2014

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